Systemic risk
Cross-border vulnerabilities should be taken more seriously, IMF paper says
Working paper says funding vulnerabilities ‘have real effects', although they have declined since the crisis due to lower exposures and increased capital levels
Fed consults over financial stability implications of commodities investment
Financial firms' involvement in commodity markets could pose a risk to financial stability, particularly in the event of a natural or environmental disaster
Canadian paper calls for ‘simple and digestible’ communication on financial stability issues
The paper says central banks should use plain language and build a coherent narrative when communicating financial stability concerns or policies
OECD’s William White fears global economic system is still highly unstable
William White tells Christopher Jeffery he is wary of placing too much reliance on the ‘science’ of monetary or regulatory policy. He also believes the world economic system is still out of balance
Moody's says big US banks no longer ‘too big to fail'
Agency cuts ratings of four systemically important US banks, including Goldman Sachs and JP Morgan, as Dodd-Frank believed to reduce prospects of future government bailouts
Lautenschläger enunciates Buba's macro-pru approach
Focus on individual banks must be complemented by efforts to stem 'pro-cyclical' tendencies of the financial system as a whole, says Bundesbank deputy
Norges Bank governor heralds countercyclical capital buffer
Øystein Olsen says 'primary purpose' of prudential tool is increasing banks' resilience as systemic risk increases; buffer will vary between zero and 2.5% of risk-weighted assets
IMF working paper examines tools to measure interconnectedness
Network analysis and price-based measures are both used to measure interconnectedness in systemic risk; paper finds many tools can reduce systemic risk, but interaction is not clear cut
Sovereign default spreads drove European bank risk exposures during crisis
Systemic risk of European banks reached its height in late 2011 at around €500 billion, based on a measure introduced in a recent Fed working paper
Intertwined Caribbean need stronger cross-border regulation, argues IMF paper
While stressing that greater financial interconnectedness could have a beneficial impact, the paper warns of regulatory arbitrage and underestimation of systemic risks in the region
IMF user guide takes stock of current toolkit for systemic risk monitoring
Paper provides guidance on selecting and interpreting monitoring tools; a continuously updated inventory of key categories of tools; and suggestions on how to carry out systemic risk monitoring
Chinese banks may face shadow finance credit crisis, say rating agencies
Strong links between the regulated and unregulated credit sectors in China due to the use of wealth management products and lending to shadow banks pose a systemic threat to Chinese banks
IMF paper proposes measure of tail-risk events
Study seeks to quantify what constitutes a systemic financial stress event, and tests the resulting metrics on 11 early-warning indicators in Europe and the US
Robert Pringle's Viewpoint: Watch what central bankers do, not what they say
Recent speeches by Ben Bernanke and Mark Carney signal a new phase in the development of central bank rhetoric. The big question is whether they preface a change in policy
BoE research examines links between channels of macro-prudential policy
Financial stability paper looks at the well-studied allocation channel and the less-studied signalling channel, finding the two to be closely linked
CPSS and Iosco start assessing compliance with FMI principles
Organisations begin process of monitoring ‘full, timely and consistent’ implementation of Principles for Financial Market Infrastructures across jurisdictions
Depositors will trust EU guarantee despite Cyprus, says Banque de France official
Policy-makers have incentive to accelerate deposit guarantee plans, says Sylvie Matherat of the Banque de France
CFTC's O'Malia: No progress on Sef rules in past two weeks
Mid-April next window for vote, but no reason for optimism, says CFTC commissioner
De Larosière slams US protectionism and EU Solvency II rules
Former IMF and Banque de France chief Jacques de Larosière says the introduction of a swathe of new regulations in Europe – by contrast to the US – may jeopardise the continent’s growth
Collateral problems in the euro area
The euro area sovereign debt crisis has caused remarkable growth in the operations of the Eurosystem. It also led to diminished collateral availability.
Systemic risk measurement gets book treatment
Jorge Chan-Lau draws on experiences at IMF, World Bank and the central banks of Canada, Chile and Malaysia to provide methods and tools to measure systemic risk
ECB researchers model systemic crises with heterogeneous interbank market
ECB working paper finds positive supply shocks feed credit booms leading to systemic banking crises
Efta court's Icesave ruling leaves European deposit insurance in tatters
Efta court move to dismiss deposit insurance claims on Iceland is a ‘Pyrrhic victory’ that throws the participation of small countries in the single banking market into doubt, argues Tim Young
Banking union no ‘magic answer’ to Europe’s woes, says BoE’s King
Bank of England governor says no sign of any significant progress in resolving the core issues afflicting the eurozone. But banking union may help in dealing with too-big-to-fail banks